Europe’s largest equities platform has extended the choice of clearing houses through which it allows trades in exchange-traded funds to be cleared.

From Monday, July 21, ETFs and ETPs traded on Bats Chi-X Europe may be cleared not only on EuroCCP, but also on LCH.Clearnet or Six x-clear.

Bats received the go-ahead from UK regulators last Friday, the exchange said.

By expanding choice, Bats reduces the amount of collateral participants need to cover ETF trades.
When trades on a platform were allowed to be cleared only at its associated clearing house, trading on multiple platforms entailed posting collateral at multiple clearing houses.

Now a participant executing ETF trades on Bats Chi-X and other platforms can clear all the trades at one clearing house.

Guy Simpkin, head of business development at Bats Chi-X Europe, said: “It makes it much easier and much less expensive and it makes it much more efficient from a collateral point of view.”

The move by Bats is part of its efforts to solve structural issues in the European ETF market. Trading in European ETFs is highly fragmented, with issuers forced to list their products across a number of exchanges.

Bats is seeking to solve the issue by creating a pan-European ETF listing venue.

Last year, the US asset manager BlackRock signalled its endorsement of Bats by listing two of its iShares ETFs on the platform and has since added a third. An additional 1,017 ETFs will be tradeable on Bats.